US legislators and bankers alike are getting ready for a stablecoin launch under the crypto-friendly administration of President Donald Trump.
Brian Moynihan, CEO of Bank of America (BofA), seems to believe that the traditional financial services sector bridging the gap into the emerging and until now quite a rogue field of cryptocurrency is an inevitability.
Stablecoins are the most likely bridge for this gap, it seems, as the currency-pegged digital assets are less volatile than cryptocurrencies like Bitcoin and Ether. Speaking at an event hosted by the Economic Club of Washington this week, Moynihan said that BofA will get involved in the stablecoin business, laws permitting.
“It’s pretty clear there’s going to be a stablecoin,” he said in an interview with veteran businessman and former US government official David Rubenstein, as reported by Fortune.
Trump’s November 2024 electoral agenda included enthusiastic support for cryptocurrencies, and the outspoken businessman and politician emerged as the candidate of choice for the crypto industry. Upon taking office he quickly issued his first executive order around crypto.
This included clamping down on a CBDC, creating a federal crypto stockpile or ‘strategic reserve’, protecting peoples’ ownership of Bitcoin and other assets – and supporting stablecoins, which he sees as key to driving the American economy forward. He has since clarified what coins will be included in a stockpile.
Banks waiting for regulation first
Trump is not the only politician to support crypto and particularly stablecoins, which as noted above have more mainstream appeal due to less volatility. Republicans tend to be more favourable than Democrats, but some members of the centrist/left party are in agreement with their conservative/libertarian counterparts.
Yesterday (3 March), Republican Congressman Tom Emmer and Democratic Congressman Ritchie Torres announced the formation of the Congressional Crypto Caucus. Like other congressional caucuses, this will function as a nonpartisan voting block, with the specific purpose of supporting and protecting what it calls ‘private innovation’ in the US.
“This Caucus serves as an ideologically unified, nonpartisan group of members that can quickly mobilise to support key digital asset initiatives in Congress,” Emmer said.
“We will continue to work to ensure the US remains the best place in the world to build and innovate in the next iteration of the internet.”
It can be expected that the caucus will lobby heavily in favour of legislation around stablecoins, which is in the process of being drafted by pro-crypto politicians who want to join Trump’s mission to make the US the ‘crypto capital of the world’.
Last month, Republican Congressmen French Hill and Bryan Steil unveiled draft legislation for a regulatory framework of a US-dollar pegged stablecoin in the US, which could be used for day-to-day payments.
Legislators like Hill and Steil, who are respective Chairs of committees around financial services and fintech in the House of Representatives, want to see legislation passed through Congress as quickly as possible. Offering a glimpse into a timeframe, lawmakers hope to pass stablecoin legislation within the first 100 days of Trump’s presidency.
Tim Scott, Republican Chair of the Senate Banking Committee, said: “Creating a regulatory framework for stablecoins is critical to ensuring the industry can innovate and grow here in the US – while promoting the US dollar’s global position, protecting consumers, and facilitating financial inclusion.
“That’s why I’ve led stablecoin legislation with my colleagues in the Senate, and I look forward to working with Chairman Hill and our House counterparts to advance a solution to President Trump’s desk.”
Even prior to Trump’s election victory and inauguration, various financial services stakeholders were getting involved in stablecoins. PayPal and Circle are two of the most notable with the PayUSD and USDC coins, while Robinhood, Kraken, Anchorage Digital, Bullish and Nuvei are involved in a stablecoin coalition, the USDG.
It is clear that traditional financial services firms are keen to join their modern, more digitally-oriented counterparts in cashing in on the +$1bn US crypto sector. However, if the BofA CEO’s remarks are anything to go by, traditional banks want to wait for the regulation to come before making such a leap.
